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Understanding Labour Law

Understanding Labour Law:

What You Should Know About Employment Law in Nigeria


Employees and Job-seekers want to know about certain rules and laws guiding workplace in Nigeria. This brief information will help answer some of your questions regarding your workplace, employment and remuneration.

Note: This is free learning and discussion material only. It does not serve as a source of legal service or advise. You are strongly advised to seek professional legal advice from a qualified Legal Practitioner should they need advice regarding specific circumstances.

  1. What are the laws relating to employment in Nigeria? In addition to the Labour Act, the following Acts also cover important elements of Employment Law;
  • Labour Act; cap L1, Laws of the Federation of Nigeria (LFN), 2004
  • Trade Union (Amendment) Act, Cap. T14, LFN, 2004
  • Trade Dispute Act, Cap. T8, LFN, 2004,
  • National Minimum Wage Act, Cap. N61, LFN, 2004
  • Employee Compensation Act, Cap. W6, LFN, 2004,
  • Factories Act, Cap. F1, LFN, 2004,
  • National Housing Fund Act, Cap. N45, LFN, 2004
  • Pension Reform Act of 2014
  • Employees Housing Scheme (Special Provisions) Act, Cap E8, LFN 2004
  • Local Content Act of 2010


  1. What documents are legally binding between employers and employees?

 An Employment Contract in addition to any document specifying terms and conditions of employment e.g. Conditions of Service, Employee Handbook, HR Policies and Procedures Manual. A contract signed by an employee means that the employee has accepted the terms and conditions in the contract. Employees should always examine their employment contract in addition to referring to the provisions of the Labour Act.


  1. I started work for an organisation but I have no written contract?

 Section 7 (1) of the Labour Act mandates that an employer should  provide the employee with a written statement of employment not later than 3 months after the beginning of the employee’s period of employment with the employer. The written statement should include amongst other things; the name of the employer, name and address of the employee and the place of his engagement; the nature of the employment; the duration of the contract, the date when the contract expires; notice period, rates of wages, method of calculation, frequency of payment of wages;, work hours, holidays and holiday pay etc.


  1. Can my employer change the terms of my employment contract?

 Yes, an employer can change the terms of a contract provided he employer provides written details of the change in the contract to the employee. Section 7(2) provides that where there is a change in the terms of the written contract of employment, the employer should inform the employee not later than one month after the change, the written details of the change. Where a copy of the written contract of employment cannot be made available to the employee, the employer should preserve a copy of the written contract and ensure that the employee has opportunities of reading it in course of his employment or that the written statement is made accessible to the employee in some other way.


  1. My organisation pays my salary late or sometimes not at all, Is this right?

Section 15 of the Labour Act provides that wages shall become due and payable at the end of each period for which the contract is expressed to subsist, that is, daily, weekly, or at such other period as may be agreed upon; provided that where the period is more than one month, the wages shall become due and payable at intervals not exceeding one month. This implies that it is mandatory for employers to pay salaries based on the contract agreed terms of employment.

  1.  Is it compulsory to do a medical test prior to employment?

 Section 8 of the Labour Act provides that every employee who enters into a contract shall be medically examined by a registered medical practitioner at the expense of the employer; but an exemption can be granted from this requirement by an order made by the State Authority (means the Governor or Administrator of a State) where the contract is for employment in agricultural undertakings not employing more than a limited number of workers, or where the employment is in the vicinity of the workers’ homes in agricultural work or non – agricultural work which the State Authority is satisfied is not of a dangerous character.


  1. Can an employer stop its employees from forming a Union?

Section 9(6)(a) of the Labour Act provides that, no contract of employment shall make it a condition that an employee shall or shall not join a trade union or shall or shall not relinquish membership of a trade union. Section 9(6)(b) of the Labour Act provides that no contract of employment shall cause the dismissal of, or otherwise prejudice an employee; i) By reason of trade union membership; or ii) Because of trade union activities outside working hours or, with the consent of the employer, within working hours; or iii) By reason of the fact that he has lost or been deprived of membership of a trade union or has refused or been unable to become, or for any other reason is not, a member of a trade union.


  1. How can an employer/employee terminate a contract of employment?

Section 9(7) of the Labour Act provides for the termination of contracts in three (3) ways, namely: i) By the expiry of the period for which it was made; ii) By the death of the employee before the expiry of that period; iii) By notice in accordance with section 11 of the Labour Act, or in any other way in which a contract is legally terminable or held to be terminated. Section 11 provides that either party to a contract of employment may terminate the contract on the expiration of notice given by him to the other party of his intention to do so. Period of Notice to be given required will usually be specified in the employment contract.  Section 11(3) provides that any notice for a period exceeding one week shall be in writing. Section 11(6) of the Act provides that nothing shall prevent either party from waiving his right to notice or from accepting payment in lieu of notice. Payment in lieu of notice means that rather than give notice either party can pay the equivalent of wages for the notice period. The Act also provides that all wages payable in money shall be paid on or before the expiry of any period of notice; and in the calculation of a payment in lieu of notice, the Act provides that it is only that part of the wages which a worker receives in money, exclusive of overtime and other allowances that shall be taken into account.

  1. Can an employee’s contract be terminated without notice?

 Yes, in a case when an employee commits an action considered as gross misconduct e.g. stealing, fraud, fighting, forgery or as defined in the employment contract/ Employee Handbook. This type of termination is referred to as ‘Summary dismissal’ and the consequences include the employee losing their rights to any terminal benefits.


  1.  I thought 8am to 5pm was standard work hours?

 Working hours are as specified in the employment contract. Section 13 of the Labour Act provides that normal hours of work in any contract of employment shall be those fixed; i) By mutual agreement; ii) By collective bargaining within the organisation or industry concerned; or iii) By an industrial wages board (established by or under an enactment providing for the establishment of such boards) where there is no machinery for collective bargaining.


  1. Can I be asked to work for 7 days a week?

Section 13(7) of the Act provides that in every period of seven (7) days, an employee shall be entitled to one day of rest which shall not be less than 24 consecutive hours. Where any reduction takes place in the weekly rest period as immediately mentioned, the Act provides that; i) Corresponding time off from work shall be allowed as soon as is possible (and this shall not be later than fourteen (14) days thereafter); or ii) Wages at overtime rates shall be paid in lieu thereof.


  1. Is an employee entitled to earning a salary when sick?

Section 16 of the Labour Act provides that an employee be paid sick leave of up to twelve working days in one calendar year where absence from work is caused by a temporary illness certified by a registered medical practitioner. Where, however, the sickness is so serious and so protracted as to frustrate the purpose or objects of for which the employee was engaged, the contract may be discharged, and the employer absolved from further liabilities without prejudice to the earned entitlements before discharge.  In calculating leave pay and sickness benefits, Section 19 of the Labour Act provides that only that part of an employee’s wages which he receives in money (excluding overtime and other allowance) shall be taken into consideration.

  1. How many days paid leave is an employee entitled to?

Section 18 (1) provides that every employee shall be entitled after 12 months’ continuous service to a holiday of; at least six (6) working days; or  In the case of a person under the age of sixteen (16) years (including an apprentice), at least twelve (12) working days. Note that an employment contract can exceed the provisions made in the Labour Act.  In addition, holiday can be deferred to a later date by agreement between the employee and employer provided that the holiday earning period shall not be increased beyond 24 months’ continuous service. Section 18 (3) provides that it is unlawful for an employer to offer or pay wages to an employee in lieu of the holiday period to a worker whose contract has not terminated.

  1. What leave entitlements does an employee who has worked for less than 1 year have?

Section 18(4) provides that person who ceases to be employed after having completed less than twelve but not less than six months in the continuous employment of an employer; or not less than six months in the continuous employment of an employer since he last qualified for a holiday, shall be paid with respect to that period of employment an amount bearing the same proportion to full pay for one week at his normal rate as that period bears to twelve months.

  1. When can a pregnant woman take Maternity Leave?

Section 54 of the Labour Act provides that in any public or private industrial or commercial undertaking or in any branch thereof, or in any agricultural undertaking or any branch thereof, a woman: a) shall have the right to leave her work if she produces a medical certificate given by a registered medical practitioner stating that her confinement will probably take place within six (6) weeks; b) shall not be permitted to work during the six (6) weeks following her confinement;

  1. Am I entitled to a salary when I go on Maternity Leave?

Section 54 (c) if she is absent from work pursuant to paragraphs (i) and (ii) above and had been continuously employed by her then employer for a period of six (6) months or more immediately prior to her absence, shall be paid not less than fifty percent (50%) of the wages she would have earned if she had not been absent; and

  1. Can an employee be dismissed when on Maternity Leave or due to pregnancy related illness?

Section 54(4) provides that, where a woman is absent from work as a result of the six (6) week confinement period or remains absent from her work for a longer period as a result of illness certified by a registered medical practitioner to arise out of her pregnancy or confinement and to render her unfit for work, then, until her absence has exceeded such a period (if any) as may be prescribed, no employer shall give her notice of dismissal during her absence or notice of dismissal expiring during her absence.

  1. Which court settles disputes between employers and employees?

The National Industrial Court of Nigeria is vested with exclusive jurisdiction on all employment, labour, industrial relations and workplace issues. This is the last resort option only after arbitration and mediation efforts have failed to settle a dispute.

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